Scanning the list of ASX 200 stocks, there are only a few stocks which even after a good run up, are still beckoning. Considered among high growth stocks, one share apparently gave another chance to investors who missed it in the first go.
Pro Medicus Limited (ASX: PME)
Pro Medicus is a leading healthcare informatics company and has recently announced a period of significant achievement marked by strong financial results and strategic advancements. The company has reported a record interim result for the half-year ending December 2024 with revenue from ordinary activities climbing to $97.2M representing a substantial 31.1% increase. This growth was significantly driven by a 34.6% surge in North American revenue which reached $86.4M. The underlying profit before tax jumped by 42.9% to $69.9M and net profit after tax also increased by 42.7% to $51.7M. Pro Medicus also saw its underlying EBIT margins improve to 72% from 66% in the previous corresponding period. The company maintains a robust debt-free financial position with cash and other financial assets at $182.3M, an increase of 17.7%. Shareholders are set to receive a fully franked interim dividend of 25 cents per share.
PME is one of the top growth stocks, as it is further highlighting its period of growth with significant new contract wins and renewals collectively valued at a minimum of $365M over duration ranging from 7 to 10 years. A notable win includes a $20M, 5-year contract with the University of Iowa Health Care (UI Health Care). This agreement involves replacing their existing PACS with the comprehensive Visage 7 Enterprise Imaging Platform encompassing the Visage 7 Viewer, Visage 7 Workflow and Visage 7 Open Archive with all to be implemented in the cloud. Pro Medicus also secured a $40M, 7-year contract with LucidHealth (prominent US radiology service provider) for the cloud-based Visage 7 Viewer across their extensive network. Existing clients have also expanded their engagements; Duke Health added Visage 7 Open Archive for $15M over 5 years and NYU Langone made a similar addition for $24M over 5 years. Crucially, the company renewed significant contracts with Mercy Health in the USA for $98M over 8 years and with a large Australian radiology practice for $32M over 5 years.
Looking ahead, Pro Medicus is well positioned for continued expansion. Dr. Sam Hupert, Pro Medicus CEO, emphasized that the company's "CloudPACS strategy" is rapidly becoming the industry standard in the North American healthcare IT market. The transactional licensing model which forms the basis of most US contracts provides an annuity-style revenue stream with potential for upside as client examination volumes grow leading to greater predictability. Pro Medicus signed a multi-year research collaboration agreement with UCSF leveraging the Visage AI Accelerator platform to facilitate AI research and development with a clear view towards product commercialization. This initiative aims to integrate both proprietary and third-party AI algorithms seamlessly into the clinician's desktop striving for better patient outcomes. The company's pipeline remains strong across all client segments including academic medical centers, integrated delivery networks (IDNs) and private practices underscoring the flexibility and scalability of its modular product offerings. With its highly scalable software-only model and contained cost base, Pro Medicus is poised to continue driving margin growth and expanding its footprint in the global healthcare imaging sector.
(Source: Company Announcements)
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